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BlackRock (BLK) Q2 Earnings: What's in Store for the Stock?
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BlackRock, Inc. (BLK - Free Report) is scheduled to announce its second-quarter 2016 results on Jul 14, before the market opens.
Last quarter, increased volatility had hit this asset manager’s earnings, which lagged the Zacks Consensus Estimate. Lower revenues were partially offset by a stable expense level.
Nonetheless, BlackRock has a decent surprise history, as evident from the chart below:
Will BlackRock be able to overcome challenges this time and post earnings beat? Or will the company again succumb to broader economic challenges? Before we go into detail discussion about the factors that are going to influence the results, let’s check what our quantitative model predicts.
Our quantitative model does not predict an earnings beat. Here is what it indicates.
Chances of BlackRock beating the Zacks Consensus Estimate in the second quarter are low. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
Zacks ESP: The Earnings ESP for BlackRock is -0.21%. This is because the Most Accurate Estimate of $4.78 is below the Zacks Consensus Estimate of $4.79.
Zacks Rank: BlackRock currently carries a Zacks Rank #3. This increases the chance of earnings beat but we also need to have a positive earnings ESP to be confident of the same.
Further, the Zacks Consensus Estimate for BlackRock has been witnessing a constant downward revision over the last 60 days. Also, the estimate of $4.79 per share for the upcoming release indicates a year-over-year fall of 3.48%.
Factors to Impact Q2 Results
Though BlackRock continues dominating the ETF market with its brand initiatives for the iShares and ETF business, macroeconomic factors are likely to adversely impact the company’s results.
During the quarter, global concerns including oil price volatility, timing of the Federal Reserve’s rate hike, Brexit results and slowdown in domestic growth dominated the investors’ sentiments. Likewise, BlackRock is not going to remain untouched by these.
Therefore, revenue growth is likely to remain challenging, while the company’s efforts to grow its iShares and Retail offerings will help it scale up its assets under management and boost margins.
Expenses were stable in the prior quarter, probably due to lower top line. However, in the second quarter, the expenses are likely to remain on the higher side due to marketing costs related to the company’s brand campaign. Also, increased regulatory compliance costs and G&A expense will keep costs up.
Stocks Worth A Look
Here are a few finance stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Comerica Incorporated (CMA - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #3. It is scheduled to report results on Jul 19.
Regions Financial Corporation (RF - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #3. It is slated to report on Jul 19.
Federated Investors, Inc. has an Earnings ESP of +2.13% and a Zacks Rank #3. It is slated to report results on Jul 28.
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BlackRock (BLK) Q2 Earnings: What's in Store for the Stock?
BlackRock, Inc. (BLK - Free Report) is scheduled to announce its second-quarter 2016 results on Jul 14, before the market opens.
Last quarter, increased volatility had hit this asset manager’s earnings, which lagged the Zacks Consensus Estimate. Lower revenues were partially offset by a stable expense level.
Nonetheless, BlackRock has a decent surprise history, as evident from the chart below:
BLACKROCK INC Price and Consensus
BLACKROCK INC Price and Consensus | BLACKROCK INC Quote
Earnings Whispers
Will BlackRock be able to overcome challenges this time and post earnings beat? Or will the company again succumb to broader economic challenges? Before we go into detail discussion about the factors that are going to influence the results, let’s check what our quantitative model predicts.
Our quantitative model does not predict an earnings beat. Here is what it indicates.
Chances of BlackRock beating the Zacks Consensus Estimate in the second quarter are low. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
Zacks ESP: The Earnings ESP for BlackRock is -0.21%. This is because the Most Accurate Estimate of $4.78 is below the Zacks Consensus Estimate of $4.79.
Zacks Rank: BlackRock currently carries a Zacks Rank #3. This increases the chance of earnings beat but we also need to have a positive earnings ESP to be confident of the same.
Further, the Zacks Consensus Estimate for BlackRock has been witnessing a constant downward revision over the last 60 days. Also, the estimate of $4.79 per share for the upcoming release indicates a year-over-year fall of 3.48%.
Factors to Impact Q2 Results
Though BlackRock continues dominating the ETF market with its brand initiatives for the iShares and ETF business, macroeconomic factors are likely to adversely impact the company’s results.
During the quarter, global concerns including oil price volatility, timing of the Federal Reserve’s rate hike, Brexit results and slowdown in domestic growth dominated the investors’ sentiments. Likewise, BlackRock is not going to remain untouched by these.
Therefore, revenue growth is likely to remain challenging, while the company’s efforts to grow its iShares and Retail offerings will help it scale up its assets under management and boost margins.
Expenses were stable in the prior quarter, probably due to lower top line. However, in the second quarter, the expenses are likely to remain on the higher side due to marketing costs related to the company’s brand campaign. Also, increased regulatory compliance costs and G&A expense will keep costs up.
Stocks Worth A Look
Here are a few finance stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.
Comerica Incorporated (CMA - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #3. It is scheduled to report results on Jul 19.
Regions Financial Corporation (RF - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #3. It is slated to report on Jul 19.
Federated Investors, Inc. has an Earnings ESP of +2.13% and a Zacks Rank #3. It is slated to report results on Jul 28.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>